Dip in earnings at MVV Energie

Persistently low market prices and spreads in the electricity generation business together with turnover losses on account of mild weather conditions led earnings at the Mannheim-based energy company MVV Energie (WKN: A0H52F, ISIN: DE000A0H52F5) to reduce in line with expectations in the 1st quarter of the current 2013/14 financial year (1 October - 31 December 2013). As announced by the company when presenting its financial report in Mannheim on Friday, operating earnings (adjusted EBIT) for the period October to December 2013 amounted to Euro 78 million and thus fell Euro 10 million short of the previous year's figure. At Euro 1.1 billion, sales for the same period remained virtually unchanged on the previous year's figure, as did earnings after interest, taxes and minority interests (adjusted net income for the period after minority interests) at Euro 40 million.

According to company CEO Dr. Georg Müller, the political framework and economic climate in the energy industry are continuing to impact on MVV Energie as well. "The margin from generating electricity has fallen consistently in recent years. Electricity volumes are now marketed in full at this low level." Not only that, the mild weather conditions to date had led to lower district heating and gas turnover with private customers. These negative factors had largely been offset by higher sales with electricity generated from renewable energies and by directly marketing renewable energies within the market premium model.

The company has therefore affirmed its full-year outlook without amendment. From an operating perspective, MVV Energie thus expects to generate slight sales growth and to post adjusted EBIT of between Euro 170 million and Euro 185 million for the 2013/14 financial year. Achievement of this earnings target will also be influenced by weather conditions. Dr. Müller is nevertheless confident that "by permanently cutting our costs and enhancing our efficiency and given growing earnings contributions from our investments in the future, we can expect to see operating earnings growth once again in the coming 2014/15 financial year already." The power plants currently under construction in the UK - the energy from waste plant in Plymouth and the biomass power plant at Ridham Dock - are scheduled to launch operations by then.

At the same time, the Mannheim-based energy company is maintaining an equally high pace of investment. By 2020, MVV Energie intends to invest Euro 3 billion in renewable energies, energy efficiency, combined heat and power generation, generating energy from waste, expanding environmentally-friendly district heating at all its locations and modernising and maintaining its grids and plants. In the first three months of the current financial year alone, the Group invested Euro 86 million, 59 percent more than in the previous year's period.

"We are purposefully and consistently building an environmentally-friendly, reliable and inexpensive energy supply", stressed the company CEO. "This way, we are making an important contribution to the energy system transformation - in the interests of the general public and as an indispensable prerequisite for Germany as an industrial location". The company was thus seizing opportunities to generate sustainable, profitable growth.

Dr. Müller is convinced that the new Federal Government has a historical opportunity and obligation act now to head for a sustainable energy system, one in which both renewable and conventional energy forms complement each other in a way that makes and microeconomic sense. "To safeguard the energy supply despite fluctuating macroeconomic feed-in volumes from renewable energies, high-efficiency conventional generation capacities will still be needed for the foreseeable future." stressed Dr. Müller. After the reform of the German Renewable Energies Act (EEG), which was a successful model for the first phase of renewable energies expansion, this was "the next urgent challenge facing the new government".